DJ MARKET TALK: Early Oklahoma Wheat Harvest Looks Poor – Co-op
11:04 AM, May 27, 2009

1204 EDT [Dow Jones] – Early wheat harvest results from one Oklahoma co-op
meet expectations for a poor crop, an employee says. Tillman Producers Co-op in
Frederick, Okla., took in its first load of wheat from this year’s harvest
Tuesday night. Yields are “really low,” office manager Lori Varner says. “It’s
looking pretty bad,” she says. “There’s not going to be much cut.” The test
weight on the load of roughly 300 bushels was 59 pounds per bushel, and
moisture was 12%, she says. Oklahoma wheat was hurt by dryness and a freeze.
The state grows hard red winter wheat, used to make bread. (TGP)

GOP: Alternative energy alone won’t meet US needs
GOP: Dems’ focus on ‘green jobs’ overlooks potential of coal, nuclear and US oil resources

On Saturday May 23, 2009, 4:15 pm EDT
WASHINGTON (AP) — A GOP senator from the nation’s leading coal-producing state contends Democrats will increase energy costs and make the U.S. more dependent on foreign oil if they focus solely on alternative energy.

In the party’s weekly radio and Internet address Saturday, Sen. John Barrasso, R-Wyo., said Republicans support a more comprehensive energy plan that would increase funding for energy research, develop U.S. oil and gas resources and promote clean coal and nuclear power.

“Democrats have focused solely on what they call green jobs. Those are jobs from alternative energy. I support green jobs, but why discriminate?” Barrasso said. “American energy means American jobs, which is why I support red-white-and-blue jobs.”

He said renewable energy such as wind and solar power is important, noting that Wyoming has world-class wind resources. But Barrasso said wind and solar only account for about 1 percent of U.S. electricity, far below what is needed to meet the nation’s energy needs.

Wyoming is the nation’s leader in coal production, and coal mining contributes hundreds of millions of dollars in revenue each year to the state.

Barrasso also said Democrats were misguided by ruling out the use of U.S. oil in places such as the Outer Continental Shelf and Alaska.

“There’s enough oil shale in the Rocky Mountain West alone to power America for the next hundred years,” he said. “As a nation, we need to be more energy independent. It is a matter of energy security, as well as national security.”

“As we approach this Memorial Day, it is my hope that the Democrats can work with us to develop solutions to make our energy supply clean, affordable and reliable,” he said.

Sen. Barrasso: http://barrasso.senate.gov/public/

From Reuters
The economic downturn is cutting investment in energy supply, raising the risk of higher prices in future that could hamper any recovery, the chief economist of the International Energy Agency said.

Fatih Birol, The IEA’s advisor to 28 industrialized countries, said in an interview he expected oil and gas upstream investment to fall 21%, or about US$100-billion ($113.8-billion), in 2009 from 2008 due to the global recession.

“Energy investment is plunging,” Mr. Birol said. “If these two come together –a further cut down in the investment and a quick and strong recovery in the economy — we may have difficulties in the oil market in a few years’ time.”

“This may mean higher prices, and this will mean the global economy, which will be on the way to recovery, might be badly, negatively affected.”

The outlook may add to concern prices could surge back to the record highs of last year once the economy and energy demand recover, although the IEA has often warned investment is too low and a supply crunch may be looming around 2012.

Spending on renewable energy, such as wind power, is falling even more rapidly than on oil and gas. The IEA expects renewables investment to slide 38% this year compared to last, Mr. Birol said.

He was citing an IEA report that will be presented to the G8 energy ministers, who are meeting in Rome this weekend.

Oil rose to a six-month high above US$62 a barrel yesterday as fires at U. S. refineries and violence in Africa’s top exporter, Nigeria, revived investors’ concerns about supplies.

Crude has also gained a lift from rallying equity markets in the past few months, which have factored in expectations of economic recovery. It is still far below its record high of US$147.27 hit last July.

Investment is falling because the credit crunch has limited companies’ access to financing, lower energy prices have hit their revenues and consumers and businesses are using less fuel.

World oil demand this year will contract by 2.56 million barrels per day (bpd), the sharpest annual decline since 1981, according to the IEA. In response, OPEC oil exporters have cut supplies sharply.

Even so, investment “is plunging so significantly it will have major implications for oil security and climate change,” Mr. Birol said.

For oil, investment cutbacks are expected to delay projects that could supply a total of 6.2 million bpd over the next few years, Mr. Birol said. That is equal to more than the combined daily production of Iran and Kuwait.

Of the total, 2 million bpd is seen as delayed immediately or indefinitely cancelled, and the rest delayed for at least 18 months, Mr. Birol said. The initial 2 million bpd represents investment of about US$170-billion.

Not all agree with the IEA. The agency warned in 2007 of a supply crunch around 2012, a view that some analysts said was actually contributing to higher prices by putting a “fear premium” in the market.

1136 EDT [Dow Jones] – ICE arabica coffee futures are trading off of fresh
seven-month highs as fund buying boosts prices amid the weaker U.S. dollar.
July coffee is up 190 points at $1.3130 a pound, off of the $1.3205 high, and
the Sep contract is 190 points higher at $1.3315. “The technical outlook is
better today, encouraging additional fund buying,” says Hernando de la Roche,
managing director of coffee trading at Hencorp Becstone Futures in Miami. A
close above $1.31 will confirm July coffee’s recent break higher and will
likely push prices toward $1.35-$1.37, de la Roche says. The physical market
continues tight and USDA attach reports forecasting slightly lower to
unchanged 2009-10 coffee crops in Honduras and Mexico are adding support as
well, says de la Roche. Volume is light as commercials sit on the sidelines
waiting for new developments, he says. Liffe July robusta coffee is up $2 at
$1,531 a ton. (HEH)

Oil is surging again today, driving right back up through the key technical and psycological level of $60.

The strength in crude oil is stemming from a host of factors, not the least of which is a weaker dollar. As drivers have noticed gasoline prices are edging up too and getting closer and closer to $3 as we approach the summer driving season.

The truth is that as the eocnomy is starting to improve and as the stock market finds some legs energy usage will increase. It’s a simple fact that any recovery in the global economy is going to require more energy andyet during this time of low prices we have not seen more investment in alternatives but far less, during this time we have not seen more drilling we have seen none, during this time we have not seen new refineries built, nor any big rush to partner with oil producing countries…..

So what’s different this time around Answer: nothing, except we will have even less supply online.

OPEC is likely to cut in my opinion or hold steady and say they will observe…OPEC is really a non issue these days in my opinion and while the World will watch and wait for their decision it will likely have any real impact on longer term prices. Stay tuned it will be a very interesting trading day today. Look for more updates soon.

Oil rises above $60 on signs recession easing
Oil rises above $60 in Asia, extending rally on signs US recession is easing

Alex Kennedy, Associated Press Writer
On Tuesday May 19, 2009, 5:08 am EDT
SINGAPORE (AP) — Oil rose above $60 a barrel Tuesday in Asia after investors took heart from signs the U.S. recession is easing.

Benchmark crude for June delivery was up $1.09 to $60.12 a barrel by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange. On Monday, the contract jumped $2.69 to settle at $59.03.

Investors on Monday cheered a better-than-expected profit report from home improvement chain Lowe’s Cos., an uptick in homebuilder sentiment and positive comments from analysts about U.S. banks, all of which suggested the U.S. economy is gradually emerging from a severe recession. The Dow Jones industrial average jumped 2.9 percent.

While most analysts expect oil prices to increase over the next year as global economic growth recovers, some suspect the recent surge from below $35 a barrel in March may have gone too far, too fast.

“The move from $40 to $60 has happened faster than we thought it would,” said Bob Doll, vice chairman of BlackRock, which manages $1.3 trillion of assets. “But a year from now oil prices should be modestly higher than where we are today.”

The jump in prices for gasoline and other oil products shouldn’t choke off a fledgling recovery in consumer demand since the fall from $147 a barrel in July helped free up extra spending cash, Doll said.

“We’ve got our eye on it, but we’re not overly concerned,” he said. “Oil versus a year ago is still down a whole bunch.”

In other Nymex trading, gasoline for June delivery rose 2.76 cents to $1.76 a gallon and heating oil gained 1.54 cents to $1.49 a gallon. Natural gas for June delivery jumped 4.7 cents to $4.19 per 1,000 cubic feet.

In London, Brent prices rose 88 cents to $59.34 a barrel on the ICE Futures exchange.

1345 EDT [Dow Jones] – Arkansas is facing serious yield losses in wheat due
to disease pressure, including head scab, according to a crop update from the
University of Arkansas extension service. Persistent rains have pushed septoria
leaf blotch, powdery mildew, and head scab to be “major yield impactors,” it
says. Many wheat fields throughout the Arkansas River Valley and Delta are
showing symptoms of head scab, also known as Fusarium head blight. Symptoms
range from less than 1% to 20% of the heads with partial to complete blighting,
the report says. Producers have been inquiring about spraying fungicide on
wheat to control disease problems, but that is not recommended for any wheat
beyond the flowering stage due to label restrictions, it says. Arkansas grows
soft red winter wheat, used to make pastries and snack foods. (TGP)

215 EDT [Dow Jones] – Technical buying and short-covering are helping
support U.S. wheat futures, traders say. KCBT July wheat in open outcry
activity hit a session high of $6.48 a bushel. That represents a fresh high for
the recent move and its highest price since Jan. 28. The markets may be finding
support from Egypt quarantining Russian wheat due to quality concerns, says
Louise Gartner, analyst for Spectrum Commodities. Three vessels carrying
Russian wheat have been detained at Egyptian ports, in addition to a shipment
quarantined last week. There are ideas Russia may not be able to make export
sales if quality proves to be a major problem, Gartner says. Slow U.S. spring
wheat seeding remains a worry, but weather looks more favorable for planting,
traders say. CBOT July wheat is up 9 cents at $5.86 1/2 a bushel, KCBT July
wheat is up 10 1/2 cents at $6.41, and MGE July wheat is up 6 1/4 cents at
$7.11 1/2. (TGP)